Greece’s Unhappy Marriage

http://www.nytimes.com/2015/03/25/opinion/greeces-unhappy-marriage.html

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ATHENS — On Wednesday, Greece will mark its independence day as it does every year. Schoolgirls in embroidered traditional dresses will march alongside boys wearing fezzes and kilt-like fustanellas — outfits worn by the Greek mountain brigands who launched a rebellion against the Ottoman Empire 194 years ago. Children will perform plays and recite poems emphasizing the injustices suffered by Greek Christians during the centuries-long Turkokratia, or Turkish domination.

These days, many Greeks see themselves fighting against a new foreign domination: that imposed by the country’s emergency creditors — the European Commission, the European Central Bank and the International Monetary Fund — known collectively as the “troika.” Independence day has therefore become a moment to reflect on what many in Greece call the “economic occupation” of their country.

During last year’s celebration, Greece’s then president, Karolos Papoulias, who is 85 and fought in the resistance during World War II, declared on national television: “Today our people are battling and struggling to break the stranglehold of the creditors. Our history guarantees that we will also be victorious in this fight.”

Alexis Tsipras, who became prime minister in January, rose to power because he has long vowed to discard the creditor-imposed austerity regimen. He has also promised to restore the nation’s sovereignty and emancipate the Greeks from colonial subjugation. By depicting Greece in a struggle for its independence, he is drawing on a rich reserve of historical resentment.

It’s not hard to see why this message works. For the past five years, the troika, in exchange for two massive bailout loan programs, has dictated Greek domestic policies — from wage cuts and tax reforms to changes in regulations on the shelf life of pasteurized milk. Troika technocrats have regularly visited Athens to check on the Greek government’s compliance; failure to conform means the withholding of scheduled payments that allow Greece to continue servicing its vast debts. Greece, in short, has been forced to do as outsiders tell it — or face an uncontrolled default and euro exit.

The troika’s intervention has preserved the eurozone, but Greece has endured a crushing economic contraction. Greeks have seen their economy shrink by 25 percent. Unemployment remains just above that rate.

But for all the talk of “economic occupation,” Greece’s dependence on more powerful European neighbors is nothing new; the country has often relied on the aid of European powers while resenting them for dictating its fate.

It was Europeans’ reverence for Ancient Greece — and their desire to see it resurrected — that fueled moral and financial support for the Greek revolution. Without the military intervention of Britain, France and Russia in 1827, Greece would never have secured its independence. But these “protecting powers” also wielded direct influence over the fledgling nation’s affairs and selected Greece’s first king, a Bavarian teenager named Otto. The king brought Bavarian soldiers with him and conducted official business in German.

Greece’s lack of sovereignty became clear again in 1893, when it defaulted after a collapse in the price of its main export — currants. The nation’s European creditors pushed for financial control over Greece in order to recover their money.

The opportunity to establish such control came a few years later after Greece lost a short war with the Ottoman Empire. European powers extended Greece a loan to pay a war indemnity, and in return for the favor, established the International Financial Commission, which presided over Greek public finances until World War II, collecting revenues from state monopolies and imposing customs duties. The commission’s presence was not entirely negative. Under its control, Greece benefited from a creditworthiness that allowed it to take out substantial public loans. Still, Greeks resented the humiliation.

This episode was followed by the disastrous World War II pillage of the nation by the Axis occupiers. When Greeks refer to “economic occupation,” they mean to draw a connection between the Third Reich’s plundering and the German-backed austerity regimen of today. In Greece, whether in a taxi, at the market or on the playground, I often hear people claim that Germany is waging war again: “This time, it’s an economic war!” One poll showed that a vast majority of Greeks believe Germany is working on creating a “Fourth Reich.”

On the January night that Mr. Tsipras gave his election victory speech, there was one little-noticed irony. He chose to speak in front of a neoclassical University of Athens building constructed during Otto’s reign, and the colorful frieze directly above him depicted a mustached Otto sitting on his throne. Pictures taken of Mr. Tspiras that night with his hands held up in victory show Otto hovering directly above him, as if having risen from his Bavarian grave to remind Greeks that, despite their declarations of independence, they remain reliant on their creditors.

Otto’s ghost should remind the new government that its claims of restored sovereignty are illusory. So long as private investors remain reluctant to fork over money to Greece without charging usurious rates, Greece will remain dependent on its European and I.M.F. creditors for more low-interest loans or debt relief. The creditors, of course, will be loath to provide assistance without strings attached.

If Greece truly wants more sovereignty, it can choose to leave the euro. So far, however, this is a degree of independence most Greeks reject out of fear that an exit will beget far worse misery. Despite the hardships they have endured, Greeks maintain an almost religious faith in the common currency. Public support for keeping the euro is nearly as high in Greece as it is in Germany, polls show.

Underlying that support is a tacit understanding that Greeks have often gained from Europe’s involvement. Greece pushed for European Community membership in the late 1970s in order to stabilize its fragile institutions after the fall of the American-backed military dictatorship. Europe’s acceptance of Greece brought benefits like agricultural subsidies and funds for infrastructure development. In the years before the debt crisis, Greece grew faster than nearly all other eurozone nations, benefiting from the relatively cheap borrowing euro membership provided.

As it has for nearly two centuries, Greece will remain dependent on its richer, more powerful neighbors, while bristling at their interference in domestic affairs. It’s an unhappy marriage, but it’s likely to endure. After all, both sides have deemed separation the only thing worse than muddling through together.

James Angelos is the author of the forthcoming book “The Full Catastrophe: Travels Among the New Greek Ruins.”